Thursday, January 12, 2017

Why workers should be federalists

As David Autor explains very well in this TED talk, jobs will not disappear with technological change. Instead, there will be more of them. But rapid changes in labor markets due to robotization and globalization are disruptive for millions of workers especially in relatively developed countries. The rise of global multinationals that manage data offer opportunities to young entrepreneurs and globalized workers, but of course pose enormous challenges for ordinary people. Globalization is here to stay, and is actually responsible for many good things that we have (this blog... my apologies for being self-centered). But it changes our life and changes the content of the optimal policies in areas like labor institutions or fiscal policies, which now have what economists would call enormous cross-border externalities. We cannot debate labor market policies as if workers were still mostly in factories, and we cannot debate fiscal policies to have a decent level of revenues to finance welfare policies as if nation-states had still the monopoly of sovereignty. Of course they are still relevant, and they should be especially if we have nothing in place to replace some of their functions. But in Europe we do have something in place, the European Union, thanks to which we have human rights, free movement and money out of the ATM's. Without supranational policies it is going to be impossible to stop tax competition (or regulatory competition in for example lowering minimum wages) or to coordinate policies to fight climate change that will destroy the life of billions of workers if nothing is done in the present and the immediate future. Without large democratic aggregates organized in successive rings of federalism, it is going to be impossible to contain financial instability, and it is going to be impossible to manage migrants and refugees. Those theoretically progressive leaders that are agnostic about nationalist movements should think twice. When socialist leaders, with a few honourable exceptions like Jean Jaurès, embraced nationalism in the first world war, they opened the door to the catastrophes that destroyed the lives of millions of working families across Europe in the next years and decades (including the second world war). Union leaders that do not raise their voice to fight national-populists in Catalonia, Scotland, Bavaria, Northern Italy, England or the Netherlands are useful idiots that should remember what happened to the left in places like Israel or Ireland once they became identity prisons.